Uber India unit's profit remains flat though grows 10% in FY17

Taxi hailing firm pays more towards deferred taxes, higher expenses weigh on profit

Uber India Systems, one of the key business units of taxi hailing company Uber saw a moderate revenue growth of 9.5 per cent at Rs 4.1 billion in FY17 even though its profit took a hit due to higher tax outgo owing to higher tax outgo as well as increased expenses. According to the company’s filing with the Registrar of Companies (RoC) sourced from data intelligence platform Paper.vc, the company’s profit for the year ended 31 March 2017 stood at Rs 190 million, nearly flat as compared to Rs 187 million reported in the previous twelve-month period.

A payment of Rs 5.6 million towards deferred taxes in FY17 hit the unit’s bottomline in the fiscal as in FY16 it has got a benefit of Rs 35 million which aided its profit that fiscal. The total expenses of the business for the period grew 10 per cent in FY17, indicating that the company is still burning cash towards driver allowances and discounts even though the burn rate may have come down.

Uber operates in India through its various subsidiaries including Uber India Systems, Uber India Technology and Xchange Leasing India Private Limited, the company’s leasing arm. Uber India Systems is one of the key business units which provides marketing and support services to Uber. The financial figures for the other subsidiaries including Uber India Technology were not immediately available.

The ride hailing market in India is witnessing intense battle with domestic rival Ola posing a strong challenge to the global major Uber. According various estimates, Ola is said to be enjoying higher market share than the American firm in India though the latter is fast closing the gap pumping in more money to its India unit, especially after the California-headquartered company sold its Southeast Asia unit to rival grab.

According to the consolidated financial statement of Ola, the Bengaluru-headquartered firm posted a 70 per cent jump in its revenues at Rs 13.8 billion in FY17 even though the company widened its losses further. The losses incurred by the company for the period jumped 56 per cent to Rs 48.98 billion when compared to losses of Rs 31.5 billion in reported in the previous fiscal.